10 August 2009 10:42 [Source: ICIS news]
SINGAPORE (ICIS news)--Naphtha discounts for spot cargoes in northeast Asia have decreased by an average of $4.50/tonne (€3.15/tonne) due to tightening supply in the region, according to industry sources on Monday.
South Korea’s LG Chemical purchased 75,000 tonnes of open-spec naphtha in the week ended 7 August at a discount of $1.50/tonne to Japan quotes CFR (cost and freight) Korea for delivery over the second half of September, market sources said.
Cargoes were traded at discounts of $5.00-7.00/tonne in the week ended 31 July, sources added.
South Korea’s Honam Petrochemicals purchased 50,000 tonnes of open-spec naphtha at discounts steeper than $6.00/tonne to Japan quotes CFR Korea.
Honam's competitor, LG Chemical, paid lower discounts of $5.00-6.00/tonne to Japan quotes CFR Korea for half the volume of the same material during the week ended 31 July.
Both cargoes were for delivery during the first half of September, market sources said.
Korea Petrochemical Industrial Corp (KPIC) also purchased a cargo of full-range naphtha in the week ended 31 July at a discount of $3.50/tonne to Japan quotes CFR Korea to be delivered over the first half of September, according to sources.
On an average, full-range naphtha material costs $1.50/tonne more than open-spec naphtha.
Tightening availability in the region due to decreased arbitrage volumes from northwest Europe has caused a reduction in discounts for September spot cargoes, sources said.
Asian naphtha prices opened softer on Monday, with second-half September price indications pegged at $644.50-645.50/tonne CFR Japan.
($1 = €0.70)
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